Leading IT retailer Matrix Warehouse is not selling just a name but an
investment in a successful business model, Group MD
Jan Boshoff tells South Africa Magazine.
By Colin Chinery

I

nternet usage in South Africa is
increasing at mega speeds. Seven
million South Africans - 14 percent of
the population - were connected to the
internet at the end of last year, up from 5.3
million 12 months earlier. At least six million
of us are currently browsing the net from
our phones.
â&#x20AC;&#x153;The market is growing all the time and
people are being introduced to personal
computers on a minute by minute basis. Yet
the market in South Africa is largely untapped,
and the potential in the individual or private
market huge,â&#x20AC;? says Jan Boshoff, Group MD of

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leading IT retailer Matrix Warehouse.
Launched 11 years ago to address the need
for a reliable computer shop, its wholesale
and retail services range from computer
hardware and software to networking, repairs,
upgrades, new computers and complete IT
solutions for home and business, all at highly
competitive prices.
All components used are registered
brand name products ensuring a high
standard of quality in the finished product,
and Matrix Warehouse custom built
computers boast a below average failure
rate at less than 0.5 percent.

Matrix Warehouse FEATURE

Today Matrix Warehouse has a national
footprint of 84 stores and is the biggest
privately owned group in South Africa. Four
years after opening its first store, in Alberton,
Johannesburg in 2000, Matrix Warehouse
moved into franchising, and today 73 of the 84
stores are franchises.
“We were expanding but being asked why
we weren’t opening even more shops. But if
you haven’t sufficient staff to open them then
the next step is to franchise. So there was a
demand for it. And if we hadn’t franchised
we certainly wouldn’t have achieved the
remarkable scale of growth we have had.”
In an intensely competitive market, the
biggest factor that sets Matrix Warehouse
apart from its rivals says Boshoff, is the
personal attention given to its customers.
“In each store we have a technical bench and
when a customer comes in with a problem the
customer can actually watch his item being

repaired or have any problem dealt with before
his or her eyes. Most other companies will not
do this.”
Soweto information and communication
technology firm Mavoni Technologies has just
announced a partnership with international
satellite company, O3B to bring high-speed
internet to thousands of schools in South
Africa’s rural areas. School access however
is not always backed up by a home PC, and
in response Matrix Warehouse has set up
internet cafes in many of its stores. “It’s
a service to the community where people
come can in and work on PCs. And as well,
hopefully, when the young people grow up and
earn an income, they will buy from us as we
are a trusted supplier through the years.”
During a relatively short lifespan Matrix
Warehouse has built a reputation for
professionalism, quality and service, growing
to become one of the top PC and networking
www.southafricamag.com

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Matrix Warehouse FEATURE

AxizWorkgroup
AxizWorkgroup is a newly merged IT
infrastructure and software distributor that
unites cutting-edge hardware and software
solutions for small, medium and enterprisesized businesses. AxizWorkgroup has long
standing relationships with leading global
vendors such as Adobe, Acer, Asus, HP,
Kingston, Intel, Logitech, Lenovo, Lexmark,
LG, McAfee, Microsoft and Symantec.
AxizWorkgroup is proud of its association
with Matrix Warehouse.

organisations in the country. “If you supply
good quality IT equipment at good prices you
will emerge as one of the top companies,
and this is what we are doing. Customer
experience is great and our biggest growth
comes through word of mouth.”
Franchising is an increasingly popular
and dynamic element in the South African
economy. According to Bendeta Gordon
of Franchize Directions, whose franchise
research, ‘The Franchise Factor 2010’ has
been tracking the growth of franchising since
1994, the best in class entrepreneurs sits in
the franchise space. “If these operators sniff
growth you can be sure a franchise business
opportunity will emerge.”
Franchising says Jan Boshoff, enlarges
a company’s buying power. “The bigger you
get the more buying power you have, the
cheaper your pricing becomes, and the more
competitive you are in your market.”
So why should a prospective franchisee look
to Matrix Warehouse? “Compared with other
franchises our biggest selling point is that you
get value for money. Buy another franchise
and you might pay R750,000, the same as us,
but we give you great value for your money
R450, 000 worth of stock and we set up your
entire shop ready to trade - full turnkey.
“To get that kind of value from other
businesses you are going to pay maybe double
that. We are not selling you just a name, but
you are investing in a successful business
model and that is why people are investing in
us – they are getting great value for money.”
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Achievable gross margins are put at 30
percent on an average R750,000 turnover.
Franchisees undergo a 28-day training
course at the Alberton head office, with a
further two days training on the point-of-sale
system. Matrix has opened franchise stores
in Soweto and other townships and, says
Boshoff, gaining momentum on a monthly
basis. “Black empowerment schemes have
brought forward entrepreneurs who are
doing very well. Around eight percent of
our franchisees are Black, not a lot and it’s
something we would like to grow.”
But Government empowerment funding
schemes are not helping. “Unfortunately the
IT industry does not easily attract this kind
of funding. They would rather invest in other
business that is less competitive.”
Why? “Your guess is as good as mine, but IT
is not an easy business, in fact it is cut throat
in a way. Pricing out there is very competitive,
so unless the applicant has experience it’s not
easy to be funded by these bodies.”
As we spoke Jan Boshoff was driving to
meet three franchisees who will be opening

shortly. “In an average week I get 15-20
applications and out of these I would probably
approve about three maybe four. And out
of those perhaps just one would have the
necessary funding in place to carry on obviously this is biggest factor here.”
IT knowledge or experience is not an issue.
“This is like any business - the people who
work for you are the important part. If you’ve
got good business skills have good business
acumen and can manage the people who
work for you, then the IT knowledge will
come in time.”
After an initial strategy of opening stores
in smaller neighbourhood shopping centres
the focus has now changed to larger centres
with greater foot traffic. “You have to grow and
adapt to change, open where there are more
feet, and the shop owners are having better
success and earning more with a greatly
increased turnover. Our objective over the
next couple of months is to build to 100 shops.
People who have grown up with us and come
through our ranks are now starting out as
Matrix Warehouse entrepreneurs.” END
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